The cryptocurrency XRP experienced a brief rally and a quick reversal on Monday after a fake filing for a BlackRock fund based on the token appeared on the official Delaware website that registers investment trusts. The asset manager confirmed that the filing was false and had no connection to the firm.
The Delaware Department of State’s Division of Corporations website showed details for something called the “iShares XRP Trust” registered to BlackRock on Monday. The filing looked similar to some other trusts that the asset manager had applied for previously, such as the iShares Ether Trust and the iShares Bitcoin Trust. However, a spokesperson for BlackRock told media outlets that the filing was falsified and that the firm had no plans to launch a spot XRP exchange-traded fund (ETF).
The fake filing triggered a brief spike in the price of XRP, which is the fifth-largest cryptocurrency by market capitalization. The token rose almost 13% in 30 minutes, reaching $0.82, before giving back those gains and trading lower on the day. The token is currently trading at $0.77, according to CoinGecko.
Crypto Community Reacts to Hoax
The news about the fake filing spread quickly on X, the social-media platform formerly known as Twitter, where many crypto enthusiasts and analysts shared their views. Some speculated that the filing was a prank or a scam, while others expressed disappointment or frustration over the hoax.
Eric Balchunas, a senior ETF analyst at Bloomberg, was one of the first to amplify the fake filing, presenting it as true. He later deleted his tweet and apologized for the mistake, saying that he was fooled by the Delaware website. He also noted that the fake filing had the same contact name as the real Ether filing that BlackRock submitted last week.
Other media outlets, such as Bankless and The Block, also recirculated the news, fueling buy pressure on XRP. However, they soon corrected their reports and updated their readers about the falsity of the filing.
Implications for Crypto ETFs
The hoax comes at a time when the crypto industry is eagerly awaiting the approval of a Bitcoin ETF by the US Securities and Exchange Commission (SEC). The prospect of this development has been a major factor behind Bitcoin’s recent rally to around $37,000 from roughly $25,000 in mid-June. Many investors and traders believe that a Bitcoin ETF would increase the adoption and legitimacy of the cryptocurrency, as well as provide a more convenient and regulated way to access the market.
However, the SEC has not yet approved any Bitcoin ETF applications, citing concerns over market manipulation, fraud, and investor protection. The regulator has also been involved in a long-running legal dispute with Ripple, the company behind XRP, over whether the token is a security or not. The outcome of this case could have significant implications for the future of XRP and other cryptocurrencies.
The fake BlackRock filing is not the first incident of false news spreading online within the crypto community. A few weeks ago, a false tweet claiming that the SEC had approved a Bitcoin ETF sent prices soaring before it was debunked. These incidents show how volatile and sensitive the crypto market can be to any incremental developments around possible crypto-centric ETFs, and how careful investors and traders should be when consuming and sharing information online.